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Legacy ERP on Cloud platforms

Many vendors are moving their applications to the cloud to capitalize on press opportunities. Recent announcements from EMC, Lawson, and Epicor repeat the same message – don’t upgrade your application, upgrade your infrastructure. At ERP Cloud News, we believe that you need to upgrade your application to take full advantage of all the benefits that cloud technologies can offer.

EMC says private cloud

At EMC World, EMC CEO Joe Tucci explained that businesses will not be willing to give up their existing investments in custom ERP applications. Further, enterprises will not be willing to invest in solutions which could lock them in to a particular vendor or cloud provider. For these reasons, he concludes that the way to the cloud is via a virtualized datacenter. More details are provided by Jason Hiner in his article EMC: Enterprise data centers won’t all flock to the cloud in ZDnet.

EMC’s Market

EMC is targeting large enterprise customers with legacy systems – the same customers that purchase a lot of EMC products today, but might be tempted to move to something different. Unfortunately, the indirect message is keep running your same old applications that are built for the 1990′s in a new data center.

ERP Cloud News opinion: Same ERP Application, New Infrastructure

The announcements from EMC, Lawson, and Epicor fail to mention that ERP applications and datacenter improvements need to occur together. Changing the infrastructure without updating the application will fail to achieve the full benefits of cloud ERP listed below.

Lawson says public and private cloud

According to David Stodder in Intelligent Enterprise, Lawson Software uses Amazon Web Services to run its suite of enterprise applications so customers can benefit from the cloud. This implementation is similar to the EMC vision, where your existing application is run on a cloud services provider which is managed through virtual private servers.

Lawson’s Market

Lawson is targeting businesses with $50M-$250M in revenue that do not have IT expertise with this offering. For customers in the $250M-$750M range, Lawson offers an internal cloud based on VMware virtualization technologies. These moves preempt customers who may think of moving to an application that was written for the cloud. The message is keep running your same old applications that are built for the 1990′s in a new data center.

Epicor says public and private cloud

According to Chris Kanaracus in PC World, Epicor launched a new multi-tenant SaaS application based on it’s existing Epicor 9 software. The Epicor SaaS version only contains a subset of features available via the on-premise offering in order to simplify implementation. The Epicor press release, stops short of saying that the application has been re-written to eliminate client software and the maintenance hassles associated with it.

Epicor’s Market

Epicor is targeting manufacturers willing to spend $400-$1,000/month with this SaaS offering. In the future, according to Chad Meyer, Epicor’s Director of Product Marketing, Epicor plans to court larger customers with SaaS offerings as well as different verticals. Epicor 9 is a new release, but the indirect message is keep running your same old applications that are built for the 1990′s in a new data center.

Benefits when applications are written for the cloud

Moving ERP to the Cloud

We agree that placing a legacy application on the cloud delivers some benefits in terms of scaling and hardware costs. These are the same benefits provided by a virtualized datacenter and have little to do with the ERP application.

Placing a web and cloud engineered application on the cloud provides benefits which are not available from moving a legacy ERP application to the cloud. Some of these benefits are described in the table below.

Benefit

Description

Access from anywhere

Web applications provide the freedom to access your applications from anywhere without installing VPN software. Placing a web front end on your existing application provides only limited access from anywhere.

Consolidated operations

Modern cloud applications allow companies with distributed offices to consolidate operations and save money by eliminating multiple systems and management processes. A legacy application moved to the cloud may help reduce some of the costs, but complete centralization is not likely without rewriting some code.

Applications engineers for the cloud naturally accomodate mobile devices. The cloud is everywhere, just like mobile devices.

Reduced network traffic

Placing a legacy application on the cloud may generate a lot of network traffic. Legacy applications were built for a LAN, while cloud applications were built for the web. As you involve more people and access from different locations, cloud application performance will exceed that of a legacy application placed on the cloud.

Involve everybody in ERP

Applications written for the cloud allow businesses to involve everybody – employees, partners, temporary workers, customers, vendors, and more in their ERP processes. A legacy application installed on the cloud does not provide this benefit due to architectural contraints which limit access, usability, installation, and ease of management.

2 Responses to “ Legacy ERP on Cloud platforms ”

Gerald Park on May 17, 2010 at 9:28 am

Note that SAP seems to be pursuing the same strategy – move legacy applications to the cloud (http://tinyurl.com/29hngv6). Not sure whether these vendors are building stop-gap solutions or if they just don’t understand that Apps and Environment have to work together.

MYOB is another vendor with a recent announcement. They seem to be re-writing their application as suggested in this article in WAtoday, “LiveAccounts will not have all the functionalities of existing MYOB packages, so existing high-end users who already have online integration via the company’s mPowered module, might not be interested in LiveAccounts.”